Abstract

Biodiversity offsetting is an increasingly popular policy instrument used to compensate for losses in biodiversity and ecosystem services caused by development projects. Although evidence suggests that offsetting can yield significant environmental benefits, application of the policy instrument is surrounded by controversy. Among other things, critics argue that offsetting builds on normatively contentious assumptions regarding the value of nature and the fungibility of biodiversity components, such as species, habitats, ecosystems, and landscapes. A large portion of the criticism targets the allegedly illegitimate commodification of nature that the policy instrument entails. Exploring the significantly more developed normative discussion on carbon offsetting, this article identifies four arguments that plausibly could be made to support the claim that it is wrong to commodify nature in the way biodiversity offsetting schemes do: the common ownership argument, the price argument, the non‐substitutability argument, and the “crowding out” argument. Although none of the arguments definitively invalidate the use of biodiversity offsets, they provide good reasons to proceed with caution when designing and implementing them.